Back to School - Time to think about RESPs

Now that the kids are back to school, for people with children or grandchildren, September is a
month of mixed blessings. Like the gentleman dancing in the store
selling school supplies singing "Its the most wonderful time of the
year", children heading off to school means the kids are out of the
house for most of the day. But it also can instill fears about how
much university may cost down the road.

We continue to recommend international funds for very young investors
RESPs, and then strip bonds and GICs as investments as the children become
teenagers. For those with 15 year olds, considering RESPs for the
first time, remember, your RESP must be set up by December 31st this
year.

Please contact us at any time if
you wish to have more information on RESP options.

Last month, the markets headed down again, both in Canada and
abroad. The frustrating statistics are becoming record breaking,
with markets and funds now reporting the worst 5 months in the last 15 years.

We recently received a very good article about the state
of the markets, by Russell, the organization behind several of
ScotiaMcLeod's Managed Account
Programs. We have been given permission to reproduce the Battling
A Bear article
in its entirety for you:

The Russell commentary on Battling
A Bear is the most concise 4 page summary that we have seen, outlining
clearly what investors
should be doing. It is highly recommended reading.

Our top recommendation 10 years ago was to invest in the
Dynamic
Dividend Fund, which holds a wide range of preferred shares and dividend paying
common shares.
Its consistent returns, low management fees, and very low risk
(volatility), continue to
make it a favoured fund, especially outside RRSPs, where the dividend tax
credit makes the after tax return that much better than GICs.

It is important to remember that the fund's return over
the last 10 years would (in a taxable account) be the equivalent of over
10% from a GICs investment, and it has been a very long time since GICs
were offering over 10%. Dynamic
Dividend Fund now also holds some income trust units, and continues to be a great holding for conservative
accounts. We would be pleased to provide tax effective investment
recommendations for your non-registered investments.

Staff Profile - Nicole Keeler

We are pleased to welcome back to our team Nicole
Keeler. Nicole recently returned to us from her second maternity
leave, and is now in her 11th year with our team.

Nicole is responsible for day to day servicing of client
accounts, and also helps to manage the structure and processes of our
group, to ensure our systems operate efficiently. Continuing
education to keep up with changes in tax and RSP regulations are always a
part of the job. Keeping abreast of fund and investment industry
trends also ensures that Nicole and the other members of our team are best
able to help you with your investments.

Fund Profile - TD Real Return Bond Fund

In the universe of 4,000 Canadian mutual funds, there
are only a few that are truly unique. One of those recently came to
our attention, the TD
Real Return Bond Fund. Like many bond funds, this fund invests
in Government bonds but in particular, a kind of bond whose returns are
pegged to inflation.

Real return bonds (RRBs) are currently available from a number
of government issuers, and have terms anywhere from 10-30 years. The
bonds are structured such that they pay interest (or grow) at a rate above
inflation. Due to the taxable nature of interest income, RRBs are
best to be held in registered accounts.

The current yields on RRBs are around 3.25%.
Basically, with inflation running at 1.5% at present, the bonds give you a
4.75% return, similar to 5 year GICs. However the beauty of these
investments is that if inflation ever returns to say 5%, your return would
grow to 8.25% (inflation plus 3.25%). Of course, if inflation drops
to 0% or if we experience deflation, a lower or even negative rate of
return is possible. However your purchasing power will grow at
3.25%.

If this seems a bit confusing, the important thing to
know is that there is a simple way to invest in RRBs, through a
professionally managed fund. The fund can benefit from changes in
the supply and demand of RRBs, and has had great performance over the last
5 years, as demand for RRBs has grown. Of course, there is a
management fee on the fund, which you would eliminate by having us
purchase RRBs for your account directly, but for smaller accounts, or
clients who are worried about inflation but don't want to be bothered with
all the details, we would recommend a look at the TD Real Return Bond Fund.

Fund News - Spectrum Funds Renamed to CI

Over the last month, the majority of Spectrum funds have
been re-branded as CI funds. In some cases, the fund managers have
also changed. Two weeks ago, we were among the 25 advisors across
Canada that got a personal telephone call from Kim Shannon, the new lead
manager of the CI
Canadian Equity Fund. Kim has taken over the renamed Spectrum
Canadian Equity Fund, and plans to use the same skill that has propelled
the CI
Canadian Investment Fund to some terrific returns. We are
pleased with that manager change and will advise clients directly if there
are any changes we don't like.

Please contact
us if you have any questions about the Spectrum -> CI changes.

On the Human
Resources & Development site, you can find information on how
to get a Social Insurance Number (SIN) for yourself or for a
child. A SIN# is required for a child if you are planning on setting
up an RESP and since it can take several weeks,
we recommend you get the SIN# now if you are planning on making an RESP
contribution by December 31: http://www.hrdc-drhc.gc.ca/sin-nas/010_e.shtml

® Registered trademark of The Bank of Nova Scotia, used under licence. ™ Trademark of The Bank of Nova Scotia, used under licence. Scotia Wealth Management™ consists of a range of financial services provided by The Bank of Nova Scotia (Scotiabank®); The Bank of Nova Scotia Trust Company (Scotiatrust®); Private Investment Counsel, a service of 1832 Asset Management L.P.; 1832 Asset Management U.S. Inc.; Scotia Wealth Insurance Services Inc.; and ScotiaMcLeod®, a division of Scotia Capital Inc. ("SCI"). Wealth advisory and brokerage services are provided by ScotiaMcLeod, a division of SCI. Insurance services are provided by Scotia Wealth Insurance Services Inc., the insurance subsidiary of SCI. When discussing life insurance products, ScotiaMcLeod advisors are acting as Life Underwriters (Financial Security Advisors in Québec) representing Scotia Wealth Insurance Services Inc. SCI is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

The Spiess McGlade Team is a personal trade name of Carl Spiess and Allan McGlade.